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Articles contributed by Dillon Eustace
The EU Takeovers Directive (2004/25/EC) (the “Takeovers Directive”) has been transposed into Irish law by the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations, 2006 (S. I. No. 255 of 2006) (the “Takeovers Regulations”). The stated aim of the Takeovers Directive is to strengthen the Single Market in financial services by facilitating cross-border restructuring and enhancing minority shareholder protection. Many of the provisions of the Directive are already contained in the existing Irish regime for the supervision of takeovers set out in the Irish Takeover Panel Act, 1997 (the “Act”), the Takeover Rules, 2001 (the “Rules”) and the Companies Acts 1963 – 2005, which will continue to apply. The Takeovers Regulations cater for those areas not already dealt with in the existing regime or areas of the regime that needed to be adjusted as a result of the requirements of the Takeovers Directive.
The issuing of securities of offshore funds for public sale into Japan is governed by a combination of the Securities and Exchange Law of Japan (the "SEL") which is enforced by the Japanese Ministry of Finance ("MOF"), the Law Concerning Investment Trust and Investment Company of Japan (the "Investment Funds Law") which is enforced by the Financial Services Agency of Japan ("FSA").Establishing a Retail Fund in Ireland for sale in Japan Fund Structures and Features
Employment Equality legislation in Ireland is to be found in the Employment Equality Act 1998 as amended by the Equality Act 2004. This legislation is extremely detailed but in effect makes it unlawful for employers to discriminate against a person on the basis of gender, marital status, family status, sexual orientation, religion, age, disability, race, and membership of the traveller community. These are referred to as the “discriminatory grounds”.
The enforcement of judgments between the EU member states is regulated by the Brussels I Regulation (44/2001, OJL 12/1, 16 January 2001) (“the Regulation”). On the 22nd December 2000, the European Council agreed the Regulation to replace the Brussels Convention on Jurisdiction and Enforcement of Judgments 1968 (“the Brussels Convention”). The purpose of the Regulation was to bring the law contained in the Brussels Convention into the main body of EC Law. The Regulation was implemented in Ireland by Statutory Instrument 52 of 2002, European Communities (Civil and Commercial Judgments) Regulations 2002, which came into force on the 1st March 2002.
Unlike the United States, which is leading the way in relation to e-discovery and where the disclosure of electronic data has become standard procedure, as of yet there is no standard protocol or practice direction issued in relation to e-discovery in Ireland. Despite this fact, Irish lawyers are beginning to appreciate the invaluable nature of electronic data which can be retrieved and used in commercial litigation.
Directive 2003/58/EC amending Directive 68/151/EEC (the “First Disclosure Directive”) became effective on 1st April, 2007 having been transposed into Irish law by the European Communities (Companies) (Amendment) Regulations 2007 (S.I. No. 49 of 2007) (the “Regulations”).
The purpose of this Article is to consider the implications of the recent English case of The Russell Cooke Trust Company Limited and Elliott1. Following this case, insolvency practitioners, preferential creditors, and third parties dealing with a company in the belief that its assets are subject to a floating charge (rather than a fixed charge) will need to examine the substance of the charge before dealing with those assets.
The Finance Bill 2008 (as initiated) was released yesterday 31st January 2008 and there have been some welcome amendments included to assist the funds industry in administering the 8 year deemed disposal rules.
Ireland's favourable tax treaties with China and Japan, regarding capital gains, mean that it is increasingly seen as a jurisdiction of choice for making equity investments in those countries. While there are a number of tax efficient Irish structures available for making such investments, we have concentrated solely for the purposes of this article on Ireland's holding company regime.
Energy efficiency has been topping the agenda of most governments in recent years. Following the Kyoto Protocol, a greater impetus has been seen at a European level and by national governments to comply with obligations under the protocol. In late 2000 the European Council, endorsing the European Commission’s Action Plan on Energy Efficiency, requested that specific measures be adopted in the building sector, as it has been shown that buildings play a major part in the consumption of energy.
One of the strategies adopted at European level took the form of the EU Energy Performance of Buildings Directive (2002/19/EC). The principal aim of the Directive is to highlight the energy performance of buildings and to promote greater energy savings therein. This update looks at the obligations on owners of commercial buildings under the directive, what they must do to comply with the directive and the timeframes involved in compliance.
The Irish Funds Industry Association has announced this afternoon a hugely significant and extremely positive change in the authorization process for Irish domiciled qualifying investor funds (“QIFs”).
The QIF authorization process, as well as its product parameters, are to be changed to accelerate the time to market and otherwise improve the attractiveness of the QIF product.
QIFs will now be capable of being authorised by the Financial Regulator on a filing only basis which will mean that there will no longer be a prior review of QIF fund documentation and a QIF meeting the preagreed parameters can file for authorization on Day X and authorization will issue on Day X+1.
The Companies Acts 1963-2006 (the "Companies Acts") provide the statutory framework for the life of
an Irish company from incorporation to liquidation.
The principal forms of business entities in Ireland are: (1) limited liability companies (private and public); (2) unlimited liability companies; (3) general partnerships; (4) limited partnerships; and (5) branches of foreign entities.
The Financial Regulator is an Irish statutory body established by the Central Bank and Financial Services Authority of Ireland Act, 2003 (“the Act”). The Act sets out inter alia the powers and duties of the regulator in respect of the authorization and supervision of financial service and insurance service providers.
The Irish funds industry has over the past twenty years established itself at the forefront on the global funds industry. Ireland is one the few locations worldwide where investment funds are established, managed and serviced in a regulated environment. The wide range of fund structures available in Ireland has facilitated the growth of the industry and US$1.2 trillion worth of assets are currently administered in Ireland.
The financial services sector has over the past twenty years been one of the pillars of the Irish economy while it has enjoyed unprecedented growth. Since its inception the investment funds industry alone has funds under management with a net asset value in excess of one trillion Euro. Having experienced 35% growth in 2005 and in excess of 20% during 2006 the growth is set to continue during 2007. There are currently over 9,000 people employed in the investment funds industry in Ireland and this combined with increased employment levels in other financial services areas reaffirms the importance of the sector to the Irish economy.
There have been a number of significant international developments since last year including the publication in July, 2006 of the Report of the Alternative Investment Expert Group (the “Expert Group’s Report”) under the auspices of the European Commission as envisaged by its Green Paper on the Enhancement of the EU framework for Investment Funds published in July, 2005, the decision of a U.S. federal appeals court to strike down the SEC’s Rule 203(b)(3)-1(d) containing the “hedge fund amendments” to the Investment Advisors Act, 1940, and recent market data released showing the state of health of the hedge fund industry as a whole.
On November 14th last it became public knowledge that the EU Nitrates Committee1 had approved a derogation to the annual amount of livestock manure applied to land established in the Nitrates Directive2 for Ireland. However, the Commission’s Decision on the derogation has not yet been published. This Article will focus on the contents of the European Communities (Good Agricultural Practice for Protection of Waters) Regulations 2006 (“Nitrates Regulations”) which implement the Nitrates Directive. Most of the provisions of the Regulations are already in force.
The concept of level privilege provides that certain communications between a client and his solicitor are privileged and immune from subsequent disclosure to a third party. When legal privilege has been established neither the client nor the solicitor can for any reason be compelled to disclose details of this communication.
With some overlapping between the Capital Requirements Directive (CRD) and the Markets in Financial Instruments Directive (MiFID) credit institutions and investment firms have the opportunity now to minimise duplication of compliance measures by identifying the common requirements, revising their internal governance framework accordingly and consequently improving their governance cohesion and reducing costs, write Paula Kelleher and Shane King.
This paper, whilst addressing a number of recent product development issues specific to the Irish funds regulatory regime for real estate funds and CCFs, has as its focus on what I consider to be the main issue facing the Irish and broader European funds industry; cross border distribution.
Although principally considering the position for UCITS, I have also touched on the most recent proposals put forward as a solution to the fragmented state of the European hedge funds industry.
The Investment Funds, Companies and Miscellaneous Provisions Acts 2006 (the “2006 Act”) became law on 24 December 2006.
The Irish company law statutes are now collectively referred to as the Companies Acts 1963 to 2006.
This update examines the procedures open to landlords facing difficulties where (i) tenants remain in possession beyond the expiration of the stated term of the lease, or (ii) the landlord wishes to terminate the tenancy prior to expiration of the stated term.
Liability Driven Investment – Start with the desired investment outcome and figure out how to get there
In the last couple of years we have seen a number of collective investment schemes which have been authorised by the Financial Regulator that either describe themselves as liability driven investment funds or life-cycle funds. These schemes are designed either for individual investors who are able to identify an approximate “target date” when they expect to need to withdraw substantial portions of their investment or institutional pension fund investors who wish to see a suite of funds with a range of maturity dates catered for in the overall offering.
The EU Market Abuse Directive, implemented in Ireland on 1 July, 2005 by the Market Abuse (Directive 2003/6/EC) Regulations (the “Regulations”), imposes significant obligations on all listed issuers (both Irish and overseas) whose securities or instruments are listed on the Irish Stock Exchange (“ISE”). The Regulations strengthen and extend the existing Irish Stock Exchange rules relating to inside information. They also create a new offence of market manipulation.
The Irish Financial Services Regulatory Authority (“Financial Regulator”) currently permits money market funds (UCITS/non-UCITS) to provide for the use of an amortised cost valuation methodology. The Financial Regulator proposes to establish new conditions under which a money market fund is permitted to follow an amortised cost valuation methodology and to use the words “money market fund” in its title. The requirements imposed by the Financial Regulator as regards the use of an amortised cost valuation process are currently set out in Guidance Note 1/00 (Valuation of Assets of Collective Investment Schemes). These are intended to be replaced by the new Guidance Note - /08 (Valuation of Assets of Money Market Funds).
The majority of professionals are aware that the provision of negligent advice or a negligent misstatement may expose them to liability. However, such professionals may not be aware of the extent of their potential liability.
Negligent misstatement relates to a representation of fact, which is carelessly made, and is relied on by another party to their disadvantage.
The aim of the Office of the Director of Corporate Enforcement (ODCE) is to improve the compliance environment for corporate activity in Ireland by encouraging adherence to the requirements of the Companies Acts 1963 to 2006 and bringing to account those who disregard the law.
There have been a number of significant international and Irish legal and regulatory developments since July 2007 in the financial services arena. A number of these developments stem from the continued movement at EU level towards the integration of European financial markets as envisaged by the Financial Services Action Plan, whilst a number of these developments are domestic in nature albeit arising from international market developments (for example, the regulation of non-deposit taking lenders engaged in retail lending in Ireland arising from concerns over defaults in the sub-prime mortgage sector).
The Personal Injuries Assessment Board (“PIAB”) is a statutory body, which came into force under the Personal Injuries Assessment Board Act, 2003, (“PIAB Act”). The PIAB Act has commenced in its entirety since the 22nd July 2004. PIAB, together with the Civil Liability and Courts Act, 2004, (the “2004 Act”) which was brought into effect on the 20th September 2004, have changed practice and procedure in civil actions in Ireland.
The Investment Funds, Companies and Miscellaneous Provisions Act, 2005 (hereafter referred to as the “2005 Act”) was signed into law on 30th June, 2005.
Directive 2005/33 which deals with sulphur content of marine fuel demonstrates the increasing regulation regarding ship emissions and more stringent control for ship owners within the EU. Annex VI (Regulations for the Prevention of Air Pollution from Ships) under the MARPOL Convention has been incorporated into Irish law.
Given the contributing role regulation may have on the competitiveness of the funds industry in Ireland and consequently its reputation, what is the regulatory outlook for 2007 and can we expect a measured approach from the Financial Regulator resulting in a positive impact on the Irish funds industry?
The European Communities (Reinsurance) Regulations 2006 (the “Reinsurance Regulations” or “Regulations”), which give effect to Directive 2005/68/EC (the “Directive”), came into effect on 15 July 2006. The Reinsurance Regulations, under the supervision of the Irish Financial Regulator (the “Financial Regulator”) establish a new regulatory framework for the authorisation and regulation of reinsurers and provide a separate regime for ‘special purpose reinsurance vehicles’ (“SPRVs”) whilst imposing particular requirements for the carrying on of ‘finite reinsurance’. Those familiar with the regulatory regime for non-life insurers will find similarities in the approach taken with the Reinsurance Regulations as the latter are largely based on the non-life insurance regime.
In recent years the commercial lease has assumed significant proportions, with more emphasis than ever being place on the commercial concerns affecting both landlords and tenants. One of the most critical concerns for both parties is their repair obligations in respect of the property. This update is a brief consideration of the salient issues.
A commercial or residential tenant will look to the Landlord and Tenant (Amendment) Act 1980 (the “1980 Act”) and the Landlord and Tenant (Amendment) Act 1994 in asserting his or her rights to renew an existing lease. These acts provide that in order to be entitled to a new tenancy beginning on the termination of the previous tenancy, a tenant must prove the existence of one of the four “equities”.
The utopian internal market where obstacles to the provision of electronic communications services are eliminated is attractive. Consumers benefit from choice and quality for effectively priced communications services while electronic communications providers enjoy fairer competition and greater legal certainty.
The last number of years has witnessed an increased interest in both Sharia Funds and in Islamic financial products worldwide. Sharia Funds are funds which are deemed to be compliant with an Islamic branch of law based on the teachings of the Koran and Sunna.
The purpose of a bank or other lending institution taking security over commercial property is to ensure a quicker and more assured payout in the event that a borrower company goes into receivership, examinership or liquidation.
The provisions of the Pensions Act, 1990 (the “Pensions Act”) were amended by the provisions of the Social Welfare and Pensions Act, 2005 (the “2005 Act”) which was passed into law in March 2005.
A collateral warranty, in the context of a commercial development, stands alongside a principal agreement, usually a contract and/or a letter of appointment. The need for collateral warranties arose because, in general, the party that commissions a building and has it erected is not the party that carries the burden if there is a defect in the building.
“The Discovery process compels pre-trial disclosure in civil proceedings of relevant documents in the possession or control of another party, or occasionally a non-party”. [Civil Procedure in the Superior Courts, Delaney and McGrath, Roundhall Sweet and Maxwell, 2001 ].
The most significant purpose of discovery was set out recently by Justice Geoghegan in the Supreme Court where he indicated that the discovery process was not to enable the settlement of a case but to provide a party with the necessary ammunition to fight a case. Marie Taylor .v. Clonmel Healthcare Limited [ 2004 1 IR 169 ].
The Transparency Directive (2004/109/EC) (the “TD”) was implemented into Irish law on 13th June 2007 by the Transparency (Directive 2004/109/EC) Regulations 2007 (the “Regulations”) and has effect from this date. The TD seeks to enhance transparency in EU capital markets in order to improve investor protection and market efficiency. The Regulations establish disclosure requirements on an ongoing basis for issuers with securities admitted to trading on a regulated market situated or operating within the EU.
In March of this year the Government, as part of its commitment in Towards 2016, introduced The Employment Law Compliance Bill 2008 (“the Bill”). The purpose of this article is to set out briefly the most important provisions of the Bill. It is possible that the Act which is ultimately passed may differ from the Bill but for the purposes of this article it is assumed that the Bill will be enacted in its entirety
Landlords often experience difficulties with a tenant during the term of a lease. Such difficulties can arise as a result of breach of a covenant or condition in a lease, such as failure to pay rent or to keep the property in good repair. The most appropriate remedy in this situation is forfeiture. ‘Forfeiture’ literally means the deprivation of a person of his or her property as a penalty for some act or omission. This update outlines the current position in Ireland in relation to forfeiture from the perspective of both landlord and tenant, paying particular attention to the grounds for forfeiture, the enforcement of forfeiture and the reliefs available.
Prescription is the method by which the law gives legal recognition to the existence of an easement which has been enjoyed over a long period as if it had been created initially by a formal grant. An easement is an incorporeal hereditament which is essentially a minor interest in land. The ownership of an easement is a mere right which confers certain rights over the land in question, but never any exclusive right to possession. An easement allows a land owner, by virtue of its ownership of its land, to exercise rights over adjacent lands. These include rights of way, light and water. The common law recognises an easement as enforceable by or against successors in title to the parties who originally created it.
The draft Companies Consolidation and Reform Bill 2007 (“the Bill”) presented by the Review Group (CLRG) represents a major overhaul of Irish Company Law and is an attempt to consolidate the thirteen Companies Acts and various Statutory Instruments into a single and more simplified piece of legislation. The new draft Bill is the result of the first comprehensive review of Irish Company Law since the report of the Company Law Review Committee (1958) and when enacted will radically reform the substance and structure of Company Law.
The culture of corporate enforcement has become a very real issue for directors. In the last two years in particular there has been an increase in the number of directors who have found themselves in the High Court facing applications to restrict or disqualify them for various breaches of the Companies Acts or their general duties as directors. A restriction or disqualification order obviously has extremely serious implications for a director and any company they are involved in. This article looks at the two relevant sections of the Companies Acts and the approach taken by the Courts
The duties owed by Directors to their company are many and diverse. The overriding principle of Company Law is that a Director’s duties are owed in the first instance to the company and not to the individual shareholders or employees. These duties are derived from various sources including common law, case law, legislation and the articles of association of the company concerned. A brief summary is set out below.
We have set out below in summary format the key changes which we have managed to negotiate with the Irish Financial Regulator over the last number of months which we think will lead to a much brighter future for the development of regulated real estate funds in Ireland.
An issue which frequently arises for companies is what do if an employee goes to a competitor or decides to set up on their own in competition to their previous employer. This is particularly serious if the employee concerned is a senior person with influence over customers or fellow employees. In some cases the loss of a key employee to a competitor can result in significant damage to the business. In the financial services sector this can be a real problem due to the fact that many valuable relationships are to some extent personal between the client and the employee when a rapport and reliance on advice has built up over a considerable period. It would not be unusual for a client to deal exclusively with a particular individual within a company. Recent years have seen whole teams leave one company and go to work for the competition. As well as the obvious loss of this resource, the company may suffer from a failure of confidence amongst clients who may perceive that there may be a fundamental problem in the company to result in a mass walk out. The bigger the numbers leaving or the more influential the personnel involved, the more likely there is to be publicity whether in the general media or in more specialised publications.
Credit unions are recognised as non-profit organisations with the principal activities of accepting shares and deposits from members, providing savings facilities and making loans available to their members at reasonable rates of interest. They are considered to be the people’s bank of choice and in the past have assisted those who may have found it difficult to get a loan from the larger banking institutions indeed this is a valuable service they still provide today. The larger credit unions are steadily expanding their range of activities from the fundamental facilitation of savings and loans and into the mainstream financial services sector.
When a client hears from a corporate or financial services partner the words “You need to talk to a litigation partner”, shivers usually are sent up their spines. For a long number of years that sense of unease was caused by the client getting involved in a process which they felt was foreign to them, took up too much time, was governed by, in their mind, arcane rules and was financially onerous. It was perceived to be a rollercoaster ride that one could not get off until the end.
The Financial Regulator issued a revised policy note on October 5, 2007 in relation to physical short selling by UCITS.
On the 5th of April, 2007, Noel Ahern T.D., Minister of the Department of Community, Rural and Gaeltacht Affairs, announced that the Charities Bill 2007 had been approved by the Government. The Bill, once passed, together with certain existing legislation, will establish a new statutory regime for Charities in the State. In addition, for the first time in Irish law, a Charities Authority will be established, which will oversee the new regime. It is anticipated that the Bill will lead to greater transparency and accountability for the public and for charitable organisations. Some of the key features of the Charities Bill 2007 are set out and discussed below.
As of 1 October, 2007, subject to certain exemptions highlighted in this article, all persons that are established in Ireland (or using their own equipment in Ireland) and are either data controllers or data processors as such terms are defined in the Data Protection Act 1988 (the “1988 Act”) as amended by the Data Protection (Amendment) Act, 2003 (the “2003 Act”) (together, the 1988 Act and the 2003 Act are referred to herein as the “Acts”) are required to register with the Office of the Data Protection Commissioner (the “DPC”).
In the context of investment fund products, asset pooling is not a new concept. For many years asset managers have been offering pooled investment products to their clients, such products including US mutual funds, European UCITS, UK OEICs, etc, as a means whereby investors of varying types and sizes could invest on a collective basis in a pool of underlying assets with the aim of benefiting from centralised, professional asset management services and specialist fund administration and custody services with the perceived additional benefits of cost savings across these various services as a result of economies of scale.
On 15 October 2008, the Luxembourg Parliament adopted a law which changes certain aspects of the Law of 15 June 2004 relating to the investment company in risk capital (SICAR) as amended (the "SICAR LAW"). This new law seeks to further adapt the SICAR to the needs of the private equity community.
The primary legislation governing the law of corporate insolvency is contained in the Companies Acts, 1963 to 2006 and the Conveyancing and Law of Property Act 1881.
Access by electronic communications operators to “local loops” owned and controlled by national incumbents is imperative for the competitive roll out of high-speed broadband services in the Member States. Currently across Europe, many incumbent network operators are modernizing local loop infrastructure to permit and enhance the delivery of high-speed broadband services to Europe’s citizens.
This update highlights changes in the procedure for the compulsory acquisition of land as enacted by the Planning and Development Act 2000 (the “Act”). Essentially, the Act transfers the functions of the Minister for the Environment and Local Government (the “Minister”) to An Bord Pleanala, the Irish planning board (the “Board”).
When purchasing an apartment within a development, the usual title furnished is long leasehold. This may be either Land Registry long leasehold or Registry of Deeds long leasehold. Each development has communal areas, which are used by all apartment owners to access their respective apartments. Accordingly, the freehold title to the development is not transferred to any one apartment owner and is retained by the landowner. This includes all of the common areas. The common areas can include, but are not limited to, the entrance to the apartment block, elevators, stairways, open spaces and parking spaces.
Personal injury litigation in Ireland has been transformed by the Civil Liability and Courts Act, 2004 (“2004 Act”). Much of the motivation behind the coming into force of the 2004 Act, was to tackle insurance costs, which was blamed on high legal costs in personal injury actions, and insurance fraud.
Following a process of consultation between the Irish Financial Regulator and the Irish Funds Industry Association (“IFIA”), a number of important positive changes have now been introduced to the regime for the authorisation and regulation of Qualifying Investor Funds (“QIFs”).
The terms “best endeavours”, “reasonable endeavours” and “all reasonable endeavours” are commonly used by solicitors in the drafting of agreements and contracts. When making use of these terms, it is key to have an understanding of their precise meaning and to also be aware of the obligations their inclusion place on clients.
Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts (the “Directive”) is due to be transposed into Irish Law on 29 June, 2008 and provides the rationale for revisiting and amending, if necessary, some of the provisions of Section 42 of the Companies (Auditing and Accounting) Act, 2003 (the “2003 Act”).
The 1952 Arrest Convention (“1952 Convention”) was given the force of law in Ireland by the passing of the Jurisdiction of the Courts (Maritime Conventions) Act, 1989 (“the 1989 Act”). The 1989 Act was passed for the purposes of the Convention and left the existing law in relation to ships to which the Convention does not apply unrepealed namely the Courts of Admiralty (Ireland) Acts, 1867 and 1876. We now have a situation in Ireland whereby there is very old legislation governing non Convention ships and relatively recent legislation covering Convention ships.
Financial Services Update; Corporate Law Update; Taxation Update; Real Estate/Property Law Update; Maritime Law Update; Listing Update.
Financial Services & Banking Law; Employment Law; Property Law; Dispute Resolution; Corporate Law; EU and Regulatory Affairs; Listings
When a client hears from a corporate or financial services partner the words: “You need to talk to a litigation partner”, shivers usually are sent up their spines. For a long number of years that sense of unease was caused by the client getting involved in a process which they felt was foreign to them, took up too much time, was governed by, in their mind, arcane rules and was financially onerous. It was perceived to be a roller coaster ride that one could not get off until the end.
Section 7 of the European Communities Energy Performance of Buildings Directive requires that when a building is constructed, sold or rented a Building Energy Rating (BER) certificate must be provided for inspection by the prospective purchaser or tenant.
In March of this year the Government introduced The Employment Law Compliance Bill 2008 (“the Bill”). The purpose of this article is to set out briefly the most important provisions of the Bill. It is possible that the Act which is ultimately passed may differ from the Bill but for the purposes of this article it is assumed that the Bill will be enacted in its entirety.
Following a process of consultation between the Irish Financial Regulator and the Irish Funds Industry Association (“IFIA”), a number of important positive changes have now been introduced to the regime for the authorisation and regulation of Qualifying Investor Funds.
VI IRISH COMPANY LAW UPDATES INSIDER DEALING
In late December, Ms Justice Laffoy issued her long-awaited judgment in the Fyffes
UNDERTAKINGS FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES (
II THE FINANCIAL REGULATOR FIT AND PROPER TEST
The Financial Regulator issued a consultation paper (CP11) on proposals for a common fit & proper test for directors and managers (hereinafter referred to as "Approved Persons") of all financial services firms in February 2005.
EU DIRECTIVE ON REINSURANCE
One of the major new tasks for the Financial Regulator in 2006, following the adoption of the EU Directive on Re-insurance (2005/68/EC), will be the regulation of more than 150 re-insurance companies based in Ireland.
CAPITAL MARKETS UPDATE INVESTMENT FUND ISDA DEFINITIONS
INVESTMENT FUND ISDA DEFINITIONS
The International Swaps and Derivatives Association (?ISDA?) has announced the publication of the 2006 ISDA Fund Derivatives Definitions. The Definitions are intended for use in confirmations of derivatives transactions linked to interests in various types of collective in-vestment schemes, such as hedge funds and mutual funds, for which a liquid secondary market may not exist.
V EUROPEAN LAW UPDATE
MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVE
The Markets in Financial Instruments Directive (?MiFID?) (2004/39/EC) aims to substantially expand and improve the provisions set out in the existing Investment Services Directive (93/22/EEC), which it will replace. The aims of MiFID are to protect investors, ensure market transparency and integrity, provide for management of conflicts of interest, impose best execution obligations on authorised firms and set out new rules on providing investors with an order execution policy.
VII TAXATION FINANCE ACT, 2006
Despite extensive lobbying of the Irish Tax Authorities (
In December 2005, the European Commission (the “Commission”) published its White Paper entitled “Financial Services Policy 2005-2010” following extensive consultation with industry and the other main European organs.
The provisions of the Pensions Act, 1990 (the “Pensions Act”) were amended by the provisions of the Social Welfare and Pensions Act, 2005 (the “2005 Act”) which was passed into law in March 2005.
(a) The Tᮡiste and former Minister for Enterprise, Trade and Employment, Mary Harney TD, has started a major new initiative to reform, restructure and update company law in Ireland. The Government has approved the drafting of a single principal Companies Bill to replace the existing companies code, composed of ten Acts of the Oireachtas plus a substantial amount of secondary legislation. The task of drafting the new Companies Bill is being undertaken by the Company Law Review Group. The general scheme of the new Companies Bill is available to view at http://www.hometown.ie/clrg.
On 8th October, 2004, the European Commission announced the entry into force of Council Regulation (EC) No. 2157/2001 on the Statute for a European Company (the "Regulation"). On the same date a related Directive on worker participation also came into force. An underlying motive behind the Commission's efforts to create a supra-national form such as the European Company was to encourage the formation of larger companies with greater economies of scale to compete more effectively on the global market with their American and Japanese counterparts. The Regulation is intended to remove the legal obstacles to the development of European Companies otherwise known as SEs (from the Latin "Societas Europaea"). SEs can be set up in one of four ways:
A Proposed Directive on the "Prevention and Use of the Financial System for the Purpose of Money Laundering including Terrorist Financing" was published by the European Commission at the end of June. This Directive will replace and repeal the existing 1991 Money Laundering Directive (91/308/EEC), which was amended in 2001 (2001/97/EC). The principle purpose of the Directive is to ensure the consistent application of the new Financial Action Task Force ("FATF") 40 Recommendations (June 2003) across all Member States. The EU Presidency has indicated that it will give priority to the Directive and technical discussions are due to commence shortly. Member States will be required to transpose the Directive within 12 months of its entry into force.
The Office of Director of Corporate of Enforcement ("ODCE") recently published both a Consultation Paper and Draft Guidance on the obligation of Company Directors to prepare a Compliance Policy and Annual Compliance Statement under Section 45 of the Act. The draft guidance explains the implications of the new provisions and will assist directors in preparing for, and complying with, their new obligation to prepare Compliance Statements.
The Data Protection Commissioner has issued the following useful guidelines which are available on the website www.dataprivacy.ie:
- Guidelines for the contents and use of Privacy Statements on Websites;
- What is Personal Data?; and
- What is Manual Data and what is a Relevant Filing System?
For further information on the above, please contact Paula Kelleher or any other member of our Regulatory and Compliance Department.
In April, 2004 the European Commission presented its proposal for a directive on reinsurance, which is intended to provide a framework for cross-border operations of reinsurance undertakings on the basis of supervision by home state competent authorities. The supervisory function must be exercised in line with provisions which will be applicable to all Member States.
The EC Insurance Mediation Directive must be implemented by Member States by 15th January 2005. The Directive applies to insurance and reinsurance intermediaries providing mediation services for insurance contracts. "Insurance mediation" means "introducing, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, or of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim." The Directive requires Member States to introduce minimum authorisation requirements for these entities and introduces a passporting system for those authorised insurance intermediaries which will allow the intermediaries to operate cross-border under freedom of services or freedom of establishment arrangements.
Ireland has recently received EU approval for its new holding company regime which will undoubtedly transform Ireland's appeal as a holding company location due to the introduction of the capital gains tax participation exemption for disposals of "qualifying shareholdings" and amendments to the Irish taxation treatment applicable to repatriated foreign dividends received by Irish resident companies. The new regime will apply retrospectively to 2nd February, 2004 and as a result it may apply to disposals which have already been completed.